Since 2016, recipients of General Operating Support (GOS) Grants have been asked to complete a report with information about key indicators. This helps staff, members of the Arts Commission, and City Council understand the impact of the Cultural Grants Program on Boulder’s community, both economically and culturally.
Boulder’s arts and cultural organizations play a crucial role in the city’s economic and cultural vibrancy. The General Operating Support (GOS) Grants survey provides insight into how these organizations have navigated the COVID-19 pandemic and its aftermath. This report analyzes data from 2019 to 2023 to assess how the sector was affected, how it responded, and whether it is on a path to recovery.
When COVID-19 struck, earned income was predicted to plummeted, while government grants and private philanthropy sustained many organizations in the short term. By 2023, as emergency federal relief funding started to deplete, financial instability, compounded by inflation, staffing shortages, and uncertainty in fundraising resulted. Organizational recovery will require new and innovative strategies.
Local government funding, adapted to broad trends and new realities, can be more impactful than ever. In 2019, $498,000 was distributed to 35 organizations. In 2023, $805,988 of General Operating Support was distributed to 42 organizations. For both years, grants were provided in amounts that range between $8,000 to $50,000 depending on the size of the organization’s budget. The reach of operating support expanded, but the award amounts remained the same. Grantmakers in the Arts released a study, Capitalization and Community: Recommendations for Capitalization of Small and Mid-Sized Arts Organizations, saying 4% of nonprofit’s budget should come from local government funding.
Boulder Arts Commission GOS funding comprised the following percentages of arts organizations’ budgets on average: 19% for small, 5% for medium, 4% for large, and 3% for extra-large. As inflation and operating costs increase, the Arts Commission will need to adapt to continue to support Boulders’ large bedrock organizations.
Pre-Pandemic Baseline (2019): Boulder's Arts Sector Before COVID-19
In 2019, Boulder’s arts organizations operated in a relatively stable financial environment. Earned income made up about 44% of revenue, while contributed income—through government grants and private philanthropy—accounted for 51%.
Financially, the average budget size was $755,941, and organizations maintained an operating reserve of $908,856, with a standard deviation of $3.2 million. These organizations employed a total of 749 staff members and relied on 3,089 volunteers to support their programming. This baseline reflects an arts sector with strong community engagement and a steady mix of revenue sources.
Pandemic (2020 - 2022): Immediate Impacts and Short-Term Reactions
The COVID-19 pandemic brought unprecedented disruption to Boulder’s arts sector. Earned income decreased 34% as venue rentals, ticket sales, and other revenue sources disappeared almost overnight, with average earned income falling from $433,886 in 2019 to $282,067 in 2020. Total audience numbers dropped dramatically, declining by more than half from pre-pandemic levels, as the total audience size fell from 587,653 in 2019 to 281,697 in 2020. Event programming also slowed, with the average number of programs dropping from 220 to 142 in 2020.
With earned income falling, organizations became increasingly reliant on contributed income, particularly government support. Specifically, average government grants more than tripled from $57,825 in 2019 to $77,602 in 2020. Conversely, income from private philanthropy declined from $197,405 in 2019 to $184,950 by 2021.
Despite the improved funding from government grants, financial instability forced organizations to make tough decisions, including staff reductions. The total workforce (staff, company members, and educators) declined from 1,456 people in 2019 to 1,161 in 2020.
The level of operating reserves for organizations has been unstable following the pandemic. In 2019 the average operating reserve was $908,857 then dropped to $789,943 in 2020. In 2021, average operating reserves rebounded significantly to over $1,000,000. However, this increase was short lived, and by 2023 the average operating reserve fell to $667,020 - a 25% decrease from 2019.
Transition (2023): Recovery or Continued Uncertainty?
By 2023, signs of recovery were mixed. Earned income rebounded slightly, reaching an average of $543,454 in 2023, surpassing a pre-pandemic (2019) average of $433,886. Organizations were also able to increase their programming (ticketed, free, and unticketed events), with the average number of events rising to 108 exceeding 2019 where organizations held an average of 83 events and total staff members climbing to 2,304 from 1456 in 2019. These figures include staff, company members, and educators.
Despite these improvements, challenges remain. Operational costs rose significantly, likely due to inflation and increased production expenses. The cost per audience member skyrocketed from $57.50 in 2019 to $91.60 in 2023, putting additional financial pressure on organizations.
Arts funders need to adapt to changing economic circumstances to best serve cultural organizations. As this data shows, operational costs have risen since the start of the pandemic. The burden on organizations is further exacerbated by the cessation of emergency federal relief funds.
Additionally, there are administrative costs that accompany applying for a grant. According to a report titled Criteria for Philanthropy at Its Best: Benchmarks to Assess and Enhance Grantmaker Impact, “Exemplary grantmakers provide more than $3,500 in grants per administrative [grantee] hour”. On average, applicants for $50,000 grants reported 18 administrative hours to complete required grant reports. Making sure grant amounts are proportional to the application and reporting requirements is paramount to achieve, “a paradigm shift that moves the asymmetric power relationship between grantmakers and grantees to one of true partnership and mutual trust.”
Trust comes with a consistent and adaptive relationship between funder and funded. During the pandemic, organizations’ average budget sizes recovered as philanthropic and government funders stepped in. The decrease in philanthropic grants, government grants, and contributed income in 2023 portends a subsequent budget ‘cliff’ yet to be realized if organizations do not supplement their budgets with earned income. A meaningful local grant program will aid in the resiliency of organizations facing this impending challenge. The GOS funding from the Boulder Arts Commission has been meaningful, but the relative impact and return on investment will decrease if award amounts do not keep pace with economic circumstances.